Hello my friends and welcome to another episode of Ask Marco where I answer your investing related questions. Today’s question comes in from Reggie and he has a question about turnkey property promoters. He says, Hi Marco, thanks for the great educational information that you put forth on your podcast. It’s helped me learn so much in just a short period of time. One question that I had for you and many of your other listeners probably have a similar question, is the following. I generally understand the difference between a turnkey promoter such as Norada real estate investments and a turnkey provider. And I generally understand how a turnkey provider makes their money in brackets, value add through renovations, profit by selling the properties that they themselves own, potential ongoing property management fees, et cetera. However, I don’t quite understand how, you know, rata earn money through helping individual investors.
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Do individual investors pay no rata a dedicated fee for your help or service or advice? Do you get a commission from the turnkey provider as the equivalent of a finder’s fee or realtor’s fee? Does Norada Real Estate Investments take a little quote meat off the bone close quote from the deal? Please don’t misinterpret this as being hostile in any way. And I don’t, I am simply trying to understand how a turnkey promoter like no rata makes money in the process because I think it’s important to understand different parties, financial incentives in brackets. He says there’s nothing wrong with having financial incentives. Everyone has them. Thanks so much for your clarification and keep up the great content, Reggie. So Reggie, great question. And I, I know I’ve kind of addressed this just a couple of times over the years here and there in the podcast, but of course not everybody would’ve caught that and that’s not a big deal.
So this is a great question and actually I’m glad you bring it up because it emphasizes one of my 10 rules of successful real estate investing, uh, directly and indirectly about being agnostic. I talk about it as being market agnostic. We’re going to talk about it from the context of being completely agnostic, whether it be markets, neighborhoods, uh, properties, providers, et Cetera, et cetera. And I’ll get to that here in a moment. But here’s the answer to your question. So, so Norada real estate for the most part is a property promoter. Much like any other real estate agent or brokerage would, you know, be promoting a property that they have available for sale or that’s available through the multiple listing service, which we don’t work with. But, uh, and that’s because we have exclusive off market properties, but a brokerage would get compensated on the sale of that property from the sale.
It’s what they refer to as a commission. And both the real estate broker on the buy side and the real estate broker on the sales side would split whatever that commission there is. That’s traditional real estate with our model. It works somewhat like that. However, we as the turnkey property promoter gets compensated by and only by the turnkey provider or builder that we are working with, they are essentially paying a marketing fee. It’s a, it’s a marketing expense, uh, to them regardless of how or who they sell it through. So whether it’s their own salesperson, whether it’s on the mls and they’re paying another broker or agent on the buy side, or whether they are selling it through some sort of online platform, regardless, they have some sort of marketing budget in place. And so whether they pay that as a marketing fee or a marketing commission or whatever you want to label it, essentially something they’re paying out.
So if we procure the sale and we’re working with you as a client and we’re educating you and guiding you and helping you build that portfolio and, and guiding you through your plan, whatever your plan is, then at the end of the day when we’ve helped to create and close that sale, we would have earned and get compensated for that sale. So essentially that, that marketing fee is earned by us. Uh, and that’s the only compensation. So we don’t get any, as you said, quote unquote meat off the bones. We don’t participate in the property in any of the equity, a profit or loss. Uh, we don’t participate in your benefits. You have full 100% benefit to all the benefits that come out of that investment property, whether it be the cashflow, the depreciation, amortization, the equity growth from the amortization of the loan that’s yours to keep. So we really don’t have any other product that we sell now that may change in the near future.
We have a book that’s going to come out soon. Um, we are talking about potentially having an online training program and if this is something of interest to people, you know, let me know. Um, we’re, we’re kicking around a few ideas, but really everything we provide at this point is completely free. There is no fee or charge for anything that we give or provide or do. So going full circle, the reason I was saying that is actually a benefit, obviously more than one way because it’s not costing you anything. Uh, the reason it’s, it’s a benefit is because it allows us to stay agnostic and unbiased because at the end of the day, whether you’re investing and building a portfolio in or Indianapolis or somewhere in Florida or Memphis or whatever the market may be that we are in at that time, we’ll get compensated regardless of what market you choose.
So we cannot be biased towards one market versus another because it makes no difference to us. The compensation is just the same. So this is why we’re driven by whatever your investment goals are at the time and your plan maybe. So that’s a great question about turnkey property promoters. If you have any other further questions or need further clarification, let me know. Reggie, that’s it for this episode. If you have a question about real estate investing or finance that you’d like me to answer on the show, simply go to passive real estate investing.com and click on the ask Marco button at the top and if you haven’t already done so, remember to subscribe. Lastly, help us share the show with other like-minded people who can benefit from it as well. Visit us on iTunes and leave us a rating and review greatly. Appreciate it. Again, thanks for listening and we’ll see you on the next episode.
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